There is a story circulating in foreign countries: In the late 1940s, the week before the approval of the oxytetracycline patent, John Smith, who was about to die, said in a serious way to the successor that if he used the soil to develop oxytetracycline The project has progressed. Never make any mistakes we made on penicillin products, and hand over the products to others for sale. Let us sell it ourselves this time.
Why do you want to sell your own products? Because they sell products to get high profits and maintain contact with consumers. The “smile curve†model of the product operation chain-profit rate discovered by Taiwanese entrepreneur Shi Zhengrong has been concerned by economists and management scientists and entrepreneurs. Because the smile curve answers why you want to sell your own products! It uses profit as the ordinate, and the product's operation chain is the abscissa. From left to right, it is the product research, development, procurement, production (manufacturing and processing), distribution, sales, and brand. The curves of the profits of the seven major operating chains are high at both ends and low in the middle, which is like a curve of smile. The smile curve extended to the industrial chain is that, in the industrial chain of today's world, the added value curve of R&D, production and marketing has a high and low intermediate form, that is, the added value of R&D and marketing links is high. The manufacturing process has a low added value and is generally "V" shaped, much like the shape of a mouth when people laugh. The smile curve is confirmed by a large number of international trade data: in the global industrial chain, the profit from the high-end segment accounts for 90%-95% of the total product profit, while the low-end segment only accounts for 5%-10%. At present, some of China's processing trade enterprises have obtained profits of only 1% to 2%. In this curve, one is R&D and design, the other is sales and distribution, and the middle is processing and production. In general, the profit margins of the two industries are between 20% and 25%, while the profit margins of the processing and production industries in the middle are only 5%. Therefore, if innovation and R&D are the genes that the company is born with, it is the basis for the sustainable development of the company to establish its own brand through its own marketing team. Foreign companies, whether they are original research or imitation, build their own sales and marketing teams. Few companies in China like to outsource product prices to others for sale. Chinese companies tend to sell products through investment.
Why should Chinese companies give up their own products? Because Chinese enterprises lack education in sales force management, they do not have a scientific sales force management theory, and they are afraid of the management of the sales team. Teacher Huang Dehua found that because there is also a smile curve in the management field. If we use the industry chain as the abscissa and the management cost (or difficulty) as the ordinate, we can get a smile curve in the field of business management. The management of enterprise activities is difficult at both ends of the curve, the difficulty is low in the middle of the curve, the two ends are R&D management and marketing management, and the middle is production and processing management. Huang Dehua spent a year in the production workshop, spent a year at the Institute, and spent 14 years in the sales field. The practice of the company for 16 years told Huang Dehua that executives and production personnel are relatively easy to manage, but it is difficult for developers and marketers to manage. Because these two types of people are highly liberal and dependent on the operation of knowledge, R & D personnel can not see the results of their research in a day or two, research ideas in the brain. The sales staff is not working inside the company. They often work in sales, the work process is uncontrollable, and the sales skills are in the brain. Therefore, R&D personnel and sales personnel are difficult to manage and have high management costs. Many entrepreneurs told Huang Dehua that in the enterprise, as long as the production start-up is normalized, production management becomes easier. Sales management is different, and current salespeople are difficult to manage. We know that OEM production is not good, and I have tried to sell the products myself. I have no problem selling the products myself, but the establishment of a business team is "big." Prof. Lang Xianping’s analysis of Pfizer’s industrial cost structure found that Pfizer’s R&D cost was 7% of the industry chain, manufacturing cost was 23%, and cost of sales was 70%. The high cost of sales means that sales are very important. If you manage the high-cost part, you will be able to obtain high profits by grasping the key. The difficulty in managing the sales team and the high management cost are the reasons why Chinese enterprises, especially Zhejiang enterprises, give up their own sales teams to sell products. Although Zhejiang entrepreneurs have a strong ability to sell their own products, they also know the benefits of selling their products. However, they are difficult to manage and costly, so they have to sigh. The big shortcoming of our private enterprises is the weak professional management ability of the sales team. If Chinese enterprises can arm themselves with advanced sales force management theory and improve their own sales team management level, then they can reduce the difficulty of sales team management, obtain the profit margin brought by high sales team, and control consumer demand and market. Changes in demand lay the foundation for building a strong brand.
Those companies that outsource their products to foreign-invested businesses to sell or through channels of investment, let them stay away from consumers and stay away from the market. The result is a slow response to consumers and the market. If the channel provider or agent does not purchase the goods, the company's products cannot be sold. This is the risk of the OEM model, which has a decisive and damaging effect on the normal operation of the company in the event of an economic crisis. Those companies with a long-term vision generally adopt a combination of their own sales team and distribution channels. Through this “sales special envoy†team to influence the purchasing behavior of end customers, and the demand information of end customers, especially consumers. Continuous feedback to the enterprise, and the physical logistics and distribution part of the product is handed over to the dealer to complete, to do more energy to improve the skills of sales force management, through sales and sales strength to build a brand that truly belongs to their own consumer loyalty. When the ability to manage the sales team becomes the competitive advantage of the enterprise, it is necessary to speed up the management of the brand team; when the management of the sales team and the brand team have a competitive advantage, the logistics and distribution functions performed by the dealers can be considered at this time. Also take it over and build a business team. In China, there are very few companies that can take advantage of the three profits on the right side of the product operation chain. This is the place where Chinese enterprises must work hard in the future. China's successful domestic enterprises, with certain sales team management experience (we usually say market operation experience), have stepped out of the country and established a huge sales force, resulting in a sharp increase in sales management costs. This shows that the management level of sales teams in China is far from the requirements of developed countries, or that our sales team management is not solid enough, it may be more experience, and the science that can be replicated is less.
The ability to do business is very strong, not equal to the management ability of the business team is very strong; for selling things, not necessarily for those who manage to sell things; sitting and waiting for customers to sell things very strong, not necessarily take the initiative to visit customers The ability to sell things to them is very strong. The ability to manage the sales force that is actively attacking is the real skill. For example, the design of sales compensation is the more important ability of sales force management. There is a Hong Kong person with strong business ability. The sales salary of the company is designed like this: the salary of sales staff is composed of basic salary, commission and bonus. . The salary regulations stipulate: 1. Basic principle: Different products have different starting lines; for the part exceeding the winning line, each box is converted into a bonus with a fixed amount, and is not capped; the sales completion rate is less than 70%, no bonus; 70% <When the total sales amount is <100%, the completion rate needs to be used as the bonus factor; when the total sales amount is >100%, it is calculated as 100%; 2. The product winning point and the single box calculation standard: A product starting point: the sales completion rate is 70% , 23 yuan per box; sales completion rate of 90%, 35 yuan per box. 3, once every quarter, the next quarter will be issued monthly. What happens to this commission and bonus design? Assuming that the quarterly sales target is 600, and the actual market starting point is 400 boxes/quarter, what will happen in the actual work? Most likely: 30 boxes in the previous month, 50 boxes in the second month, 70 boxes in the third month, 200 boxes in the fourth month, 300 boxes in the fifth month, 500 boxes in the sixth month, the seventh 20 boxes in the month, 10 in the eighth month, 20 in the ninth month... So there was a hockey stick phenomenon. This phenomenon is very lethal to the company. The cumulative sales volume has not increased or increased, but the company pays The bonus has increased a lot. why? For example, if the sales volume of the A-sales salesperson is 1200 boxes in three quarters, the average is 400 boxes per quarter, and the bonus should be 0 per quarter. However, the actual situation is that Aki’s bonus in the previous quarter is 0, and the third quarter bonus is also It is 0, but the bonus for the second quarter is 35,000 yuan. The result is that Aki just played digital games, and the company paid 35,000 yuan more. Why is this happening? Because it is difficult to get bonuses in the previous quarter, even if you try to achieve 450 boxes, you can only make 23 yuan / box. If you take a lag in the previous quarter or an order in the third quarter, the bonus can reach 35,000 yuan. And there is no need to work hard to increase 50 boxes per quarter. If there is a ratchet effect in the distribution of sales indicators, then salesman Aki will not try to increase 50 boxes/quarter. For enterprises in good times, they may suffer such losses, but when enterprises are in adversity, it is definitely a disaster. If there are 200 sales representatives in the company in good times, then the company will pay 7 million bonuses, and the salesperson will take the 7 million bonuses. It will not say that the company is good, but will only say that the company management is stupid. What is more serious is that the hockey stick phenomenon will greatly increase the management cost in the supply chain, and thus the bullwhip effect in the supply process. What is even more frightening is that the sales team has developed a culture of drilling holes.
Through the research on foreign-funded enterprises in China, Huang Dehua found that they rarely hand over the products to others for sale. They all sell through their own sales teams. They all rely on their own strength to build a faithful, professional and efficient field sales team. the way. Because the sales team is the infantry that captures and holds the position step by step, without the support of marketing, the cost of the infantry's offense is immeasurable, but without the sales team, there is no real occupation of the position. There used to be such a saying: the sales team is booming, and the company is booming! Future successful companies will manage the sales team's scale structure design, sales indicator allocation, sales area planning, sales compensation design, sales performance evaluation and sales successors, etc., suppress ratcheting effect, marginal diminishing effect, hockey stick effect and Kani Man lost the aversive effect, preventing Russian dolls, TOPK matching disorders and sensory attribution disorders. Future Chinese companies will win in sales force management and will make breakthroughs at the right end of the smile curve. (Huang Dehua)
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